Tuesday, 17 December 2013

Chart of the Day: The Steepening of the U.S. Yield Curve: December vs May 2013

Since Bernanke first uttered the word "tapering" back in May this year, the yields on U.S. treasuries have increased significantly, with the 10-year yield having climbed 122 basis points, or 73.5% (from 1.66% to 2.88%).

On average, the treasury yields depicted in the chart below have increased 75.3% basis points, or 57.4% (from 1.31% to 2.07%) since the beginning of May to 13 December this year.

So, whether Bernanke and the FOMC decide to taper or not this week, the steepening of the yield curve since May indicates that at least some tapering is already priced in.